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Paper info: Beer maker takes on supermarket bullies

Title


Beer maker takes on supermarket bullies

Authors


Catherine Sutton-Brady
University of Sydney
Australia
Catherine Sutton-Brady and Patty Kamvounias

Place of Publication


The paper was published at the 28th IMP-conference in Rome, Italy in 2012.

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Abstract


This paper investigates recent price wars in the Australian retail industry and its impact on networks and relationships in that industry. Two major Australian supermarkets account for 80% of grocery sales in the Australian market and as such are considered powerful players in the market. This paper looks in detail at two recent price wars and the reaction of the relevant suppliers. It attempts using the theory of networks and relationships to explain the differing reactions.Research Method: Data is gathered over a 12 month period from leading Australian newspapers, allowing the story of the price wars to be followed in detail.Research Findings: The paper focuses on two price wars that the two major supermarkets fought against each other, one was a milk price war the other a beer price war. The paper shows the completely different reactions of the suppliers to the bullying tactics of the supermarket chains. It also looks at the impact on the network of the differing reactions, showing very different network effects in both sectors. The paper also looks at the relevant competition law, which allowed the beer maker to exercise some power in an otherwise powerless situation.Main Contribution: This paper shows that despite the fact that the supermarket chains have unparalleled purchasing and selling power, and a seemingly unassailable position in the network they can be outmaneuvered by a player willing to take a legal stance. It also shows the negative impact throughout the network of taking on the big playe